The Philippines is awaiting a critical decision from the Financial Action Task Force (FATF) in February, which could see the country removed from the “grey list” of jurisdictions under increased monitoring for financial crimes such as money laundering and terrorism financing.
The nation was first placed on the FATF grey list in June 2021, following a review that found insufficient compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) measures. Being on the grey list affects a country’s financial reputation, often leading to reduced foreign investment, increased business costs, and delays in international transactions.
Efforts to Strengthen Financial Integrity
Since 2021, the Philippines has worked to address FATF’s concerns. President Ferdinand Marcos Jr’s administration implemented the National Anti-Money Laundering, Counter-Terrorism Financing, and Counter-Proliferation Financing Strategy (NACS) in 2023. Additionally, a ban on Philippine Offshore Gaming Operations (POGOs), which had been linked to financial crimes, was introduced last July.
Despite these measures, challenges remain. Some illegal gaming operations continue to operate, and the financial sector still faces risks from less-regulated corporate organisations. Moody’s analyst Choon Hong Chua has highlighted that corporations and banks in the Philippines are susceptible to criminal infiltration.
A History of FATF Scrutiny
The Philippines has faced scrutiny from FATF several times over the years. In 2001, it was blacklisted for the lack of AML/CTF legislation, alongside just two other jurisdictions. In response, the country passed its first Anti-Money Laundering Act in 2003, leading to its removal from the blacklist. However, it was placed on the grey list in 2012 due to insufficient CTF measures, removed in 2013, and returned in 2021.
FATF Review and Outlook
The FATF has recognised that the Philippines has “substantially completed” an 18-point action plan aimed at restoring financial integrity. The Central Bank Governor, Eli M Remolona Jr, expressed cautious optimism ahead of the upcoming plenary in Paris. “We are hopeful that we will hear good news,” he said.
The FATF’s decision in February will determine whether the Philippines can finally exit the grey list, a move that could improve its global financial standing and boost investor confidence.